The Hindu Business Line : Ministers endorse World Bank's new anti-corruption strategy

World Bank promises
The World Bank President assured that the Bank intended to impose "no new form of conditionality" for development funding by insisting on good governance and anti-corruption measures by the member-countries.
An equally important objective was to assist the poor and "not to line the pockets and bank accounts of the corrupt and powerful."

Singapore, Sept. 18

Finance Ministers from countries across the development divide, meeting in Singapore on Monday, "supported" the World Bank's "proposed governance and anti-corruption strategy."

Prior to the "unanimous endorsement" by the Development Committee - the forum that brought together these state-representatives and central bank governors - the Finance Minster, Mr P. Chidambaram, sounded a note of warning. He told the Committee that the Bank's new plan had raised the possibility of "the risk of governance becoming a conditionality for development."

He also insisted that the anti-corruption drive "should not become [an] anti-development" dilemma for the global community.

The Committee meeting was attended by the Reserve Bank Governor, Dr Y.V. Reddy, among others.

Addressing a press conference after the meeting, the World Bank President, Mr Paul Wolfowitz, maintained that the Bank intended to impose "no new form of conditionality" for development funding by insisting on good governance and anti-corruption measures by the member-countries.

He also held out an assurance that the Bank would stay engaged with India, despite some recent turbulence in their relationship over funds for rural health schemes.

Besides indicating that the Bank's funding of the social sector in India would not be jeopardised, Mr Wolfowitz said the bilateral engagement would cover issues of "safeguards" in the context of the principles of good governance and also anti-corruption agenda.

Mr Wolfowitz earlier told the Development Committee that "sound principles of accountability and transparency not only assure [that] funds are spent as intended, but also are essential to accelerating economic growth, helping the poor to escape poverty, and achieving the [United Nations] Millennium Development Goals."

An equally important objective, he noted, was to assist the poor and "not to line the pockets and bank accounts of the corrupt and powerful." However, he conceded that corruption-free governance "takes place over time, not overnight." Overall, he projected the Bank as a pro-poor institution that would not go by the dictates of the developed bloc.

In a nuanced address, Mr Chidambaram said: "Development cannot wait for improved governance and a corruption-free world. Both must go `hand-in-hand.' We support a simultaneous and curative approach to these issues in any Bank strategy in this regard. This will avoid the risk of governance becoming a conditionality for development."

Casting doubts "if the Bank can categorise countries on a governance index" and pointing out that "governance diagnostics is [still] an evolving subject," he noted that "the correct approach will be to determine, in consultation with country-governments and through extended research, a set of transparent, measurable and consistent governance indicators." Until this could be done, the Bank should continue to pursue "the established deliberative mechanism."

The Bank's move to see some countries in the "high-risk" category, under these new guidelines, could mean that "zero tolerance" of perceived bad governance and corruption would result in "zero development."

On the Doha Round of multilateral trade talks, Mr Chidambaram said the new decision by some donor countries to evolve an "aid for trade" regime "cannot be a substitute for the expected development benefits, particularly on market access." The move in question was the pledge of aid for infrastructure projects that could stimulate trade.

Any "robust aid for trade package" must be "channelled multilaterally, for ensuring maximum effect on the ground, and integrated into country development strategies," Mr Chidambaram said.

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